Maryland Legislative Session 2025: Crossover Day Highlights and Budget Update

Crossover Day in the Maryland General Assembly is more than just a procedural deadline—it’s the moment where legislative priorities are put to the test. Bills that clear their chamber of origin by this day remain in play, while those that don’t are thrown into political limbo and left scrambling for a last-minute reprieve. It’s a high-stakes day of marathon sessions, closed-door negotiations, and political maneuvering as lawmakers push their key initiatives forward. With only a few weeks left in the session, the bills that survived this Crossover Day now start over in the opposite chamber.

Below are key takeaways from Crossover Day 2025, highlighting significant policy debates and their implications for businesses and local governments.
 

Energy and Utility Regulations

With rising utility costs affecting Marylanders, lawmakers debated key bills to address transparency and state control over energy production.

• Certificate of Public Convenience and Necessity Reform (HB 829): This bill enhances regulatory scrutiny over new transmission lines, requiring detailed analysis of alternatives before approval. It was advanced in the House following debate over its impact on local authority and energy infrastructure development.
• Utility Transparency and Accountability Act (HB 121): Passed by the House, this measure mandates public disclosure of how Maryland utility companies vote in regional energy policy decisions.
• New Generation Energy Act (HB 1035 & SB 937): Though it missed the crossover deadline, this bill remains a priority, aiming to reduce Maryland’s dependence on out-of-state electricity generation.

Tax Policy

With a $3.3 billion budget deficit looming, debates over strategies to generate additional sources of revenue intensified.

• Business-to-Business Service Tax: Gov. Wes Moore indicated that a broad 2.5% sales tax on business-to-business services will not be included in the final budget. Administration officials, however, have signaled that a more targeted service tax, affecting both businesses and consumers, remains under consideration as part of ongoing budget negotiations.
• Soda Tax Rejected: A proposed 2-cent-per-ounce excise tax on sugary beverages was shelved following strong opposition from business groups and Gov. Moore.

Immigration Policy

In light of continued threats from the White House, Maryland lawmakers advanced multiple bills aimed at protecting undocumented residents and defining the state’s role in immigration enforcement.

• Protecting Sensitive Locations Act (SB 828): Passed by the Senate, this bill restricts Immigration and Customs Enforcement (ICE) operations in schools, hospitals and other sensitive locations without a judicial warrant.
• Data Protection for Undocumented Residents (SB 977): This measure requires a judicial warrant before state agencies can share personal data with immigration enforcement entities. The bill passed in the Senate now moves to the House, where no companion legislation currently exists, leaving its future uncertain.
• Local ICE Cooperation Restrictions: A bill barring state and local agencies from entering agreements with ICE advanced, though efforts to carve out exceptions for individuals with violent criminal records were rejected.

Eviction Policy

The General Assembly made strides in tenant protections but also faced roadblocks on broader reform efforts.

• Tenant Possessions Recovery Act (HB 767): The House passed this measure granting evicted tenants a 10-day grace period to collect personal belongings, mitigating the trauma of sudden displacement.
• Good Cause Eviction Bill (SB 651): The Senate Judicial Proceedings Committee remains deadlocked on this measure, which would require landlords to provide a legally defined reason to refuse lease renewals.

Unsuccessful Bills

Several high-profile measures failed to meet the crossover deadline:

• End of Life Option Act (SB 926 & HB 1328): Allowing terminally ill patients to request and self-administer life-ending medication died with the lack of committee support.
• Traffic Stop Reform (SB 292): Aimed at reducing certain routine police stops, this measure failed amid law enforcement opposition.
• IVF Legal Protections (SB 001): A bill to shield in-vitro fertilization services from out-of-state legal challenges was withdrawn by its sponsor, citing drafting concerns.

• Beer and Wine in Grocery Stores (SB 824 & HB 1379): A bill designed to generate revenue by allowing grocers to sell beer and wine was withdrawn by the Senate sponsor after determining there was insufficient committee support. The House version remains stalled.

Budget Update

Maryland’s budget remains the dominant issue heading into the final weeks of the session. Gov. Wes Moore and legislative leaders have reached a final framework to close a $3.3 billion budget deficit. The framework includes $1 billion in tax increases coupled with an estimated $2.5 billion in budget cuts. According to lawmakers, the agreement aims to balance the budget while preserving essential services and avoiding major tax burdens on most Marylanders.

Funding Mechanisms Included in the Bill:

• Income Tax Increases for High Earners: Individuals earning between $500,000 and $1 million will see their tax rate rise from 5.75% to 6.25%, while those earning over $1 million will face a 6.5% rate.
• New 3% Tax on IT and Data Services: This includes major cloud computing and website providers but excludes financial and consulting services.
• Higher Cannabis and Sports Betting Taxes: Cannabis sales tax will increase from 9% to 12%, and the sports betting tax will rise from 15% to 20%.
• Capital Gains Surcharge: A new 2% surcharge on capital gains income exceeding $350,000, with a portion allocated to transportation funding.
• Transportation Revenue Increases: This includes raising the vehicle excise tax from 6% to 6.8%, doubling vehicle titling fees and increasing emission fees.
• Sales Tax Expansion: The state’s 6% sales tax will now apply to vending machine purchases and short-term rentals.

Funding Mechanisms Ruled Out:

• No Broad Business-to-Business Service Tax: A previously proposed 2.5% tax on a wider range of business services was eliminated.
• No Delivery Fee: A proposed 75-cent fee on home deliveries from retailers like Amazon and GrubHub was not included.
• No Sugary Beverage Tax: A tax on sodas and sugary drinks, once under consideration, was dropped from the final plan.
• No Property or Estate Tax Increases: Proposals to raise property taxes or change estate tax exemptions were not pursued.
• No Gas Tax Increase: Despite discussions, the state opted against increasing fuel taxes.
• No Expansion of Gambling into iGaming: Proposals to expand online gaming as a revenue source were excluded.

The budget is expected to be finalized before the legislative session ends on April 7.

For more details on how these legislative developments may impact your organization, contact Greg Sileo at gsileo@bhfs.com.

This document is intended to provide you with general information regarding Maryland policy updates. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.